The Sobering Facts About Employee Fraud
One of the topics I frequently return to is the risk assessment aspect of a recruiter’s job, or the ‘defensive’ recruitment skills, such as background and reference checking, that are a necessary part of doing a complete job as a ecruiter. Unfortunately, there is still an undesirable tendency for these skills to be deemed an ‘admin’ part of a recruiter’s job.
So it was with great interest that I read a recent news report generated by the release of research into employee fraud in financial institutions in the period since January 2000.
Here’s what the report revealed:
Total amount of money fraudulently obtained by
employees |
$217.3 million
|
Number of individual cases
|
120 (53% male, 47% female)
|
Number of these individual cases that were at one of
the ‘Big 4’ banks |
69
|
Largest individual fraud (which primarily funded
expensive pearls, houses and Michael Jackson paraphernalia) |
$45 million
|
20 years plus service of employee to defrauded
employer |
1/3rd of cases
|
10 – 20 years service of employee to defrauded
employer |
1/3rd of cases
|
Ten year age range most common in employee
|
30-39 years (41% of cases)
|
Previous convictions for fraud amongst 123
individuals |
5 people
|
Most common motivation for fraud
|
Gambling (52% of cases)
|
Second most common motivation for fraud
|
Improve lifestyle (29% of cases)
|
Most common way the fraud was executed
|
Money stolen from customers’ bank accounts or term
deposits (34% of cases) |
Longest period of undetected fraud
|
16 years
|
The report also revealed that one of the 120 cases involved an employee that was hired without any background check which, had it been undertaken, would have revealed this man’s three (!) previous gambling-related convictions for fraud.
in motivating or enabling fraud: